Nathan Tinkler must pay Blackwood $12 million by the end of the month.

AAP: Tracey Nearmy

Former billionaire Nathan Tinkler has reached an agreement with his creditors, offering a third of what he owes them.

Mr Tinkler owes Blackwood Corporation $30 million after failing to follow through on a deal to buy shares in the company.

Blackwood has agreed to a $12 million settlement in return for ending legal proceedings against Mr Tinkler.

The payment must be made by the end of the month or Blackwood will continue to pursue Mr Tinkler in court for breaching his duties as a director and operating while insolvent - which can carry a jail term.